The Euro climbed against the weakened Pound on Monday to knock the GBP/EUR rate down below the 1.20 level for the first time this year as a Bank of England policy maker talked down Sterling and the Euro remained supported by the European Central Bank’s decision last week to maintain interest rates and not introduce further monetary stimulus measures.
Sterling tumbled against several major peers yesterday after the BOE deputy governor said that a further appreciation of the currency is likely to hamper the UK’s economic recovery and dent exports. Following his comments the currency fell sharply against the Euro.
Data released early in Tuesdays session put some pressure on the single currency after current account and balance of trade data for Germany came in below economist forecasts. GDP data out of Italy also came in worse than expected.
The Pound meanwhile found support from data which showed that factory production in the UK increased more than forecast in January, supporting signs that the UK economy is continuing to gain in strength.
According to the Office for National Statistics, output rose by 0.4% on a monthly basis and jumped by 3.3% compared to the previous year. Industrial production also showed improvement with production rising by 2.9% year on year. On a monthly basis however industrial production eased.
The Pound could make further gains if the NIESR’s GDP estimate comes in stronger than expected. The group currently predicts that the UK economy will expand by 0.8%, an improvement in that figure will offer support to the currency.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3857 ,
Euro,,British Pound,0.8326 ,
Euro,,Australian Dollar,1.5336 ,
Euro,,Canadian Dollar,1.5413 ,